NEW YORK--(EON: Enhanced Online News)--Improving car sales suggests strong potential for growth in electric
vehicle (EV) sales in China and the U.S. However, a combination of
technological, economic and political factors, including the influence
of more planned mass-market EV introductions over the next four years,
could provide car-makers with nine additional growth markets to invest
in, according to new research from Accenture.

“Plans for
an assortment of more affordable EVs with greater range aimed at the
mass-market segment are moving EVs toward higher volume car-buying.
Given this development, accessing EV-market attractiveness for each
market individually will be essential for automakers as they plan for
the growing differences between domestic markets.”

China and the U.S. ranked as Best-in-Class countries because they show
both high EV market size and EV market growth. Accenture believes
automakers should target China and the U.S. for investment in stronger
distribution networks for EVs, while adapting product portfolios to
cater to specific customer preferences in each country. Factors in their
high ranking include the future volume of buyers who will be able to
afford EVs and the development of an extensive charging infrastructure.

All of the markets were analyzed for local factors including
governmental regulations and subsidies, as well as non-market-specific
factors, such as vehicle range and charge time, then placed into a
matrix.

“In the markets that show growth potential for EVs automakers need to be
ready to tap the expected growth in demand to ensure that they reach
critical mass when the growth in demand is kicking off,” said Christina
Raab, managing director in Accenture’s Automotive practice. “Plans for
an assortment of more affordable EVs with greater range aimed at the
mass-market segment are moving EVs toward higher volume car-buying.
Given this development, accessing EV-market attractiveness for each
market individually will be essential for automakers as they plan for
the growing differences between domestic markets.”

Canada, France, Germany, Japan, the Netherlands, Norway, South Korea,
Sweden and the United Kingdom are all ranked as High Potentials for
their high growth prospects between now and 2020, but a low EV market
size currently. They are typified by government plans to invest
significantly to make EVs more attractive.

As these markets may see significant growth over the next four years,
Accenture believes automakers should invest in them to ensure that they
are best placed to tap the expected market growth. While the market
share of EVs as a percentage of the global automotive market in 2015 was
only 0.3 percent, or 270,000 EV cars, an increase to just three percent
would equate to 2.7 million EVs. This excludes figures for plug-in
hybrid electric vehicles. It means that, for example in the current
market environment of France, manufacturers should quickly make use of
existing governmental measures to support EV purchases. OEMs should
consider targeting all of those countries where governmental support and
subsidies exist as a priority, before these measures are removed.

The three markets of Brazil, India and Russia are classed as Hesitators
by Accenture due to the small market size and an expected low growth
rate. These markets are characterized by a lack of public charging
infrastructure and low fuel prices, which have been constantly low in
the respective markets, independent of current low oil prices. This
combination makes EVs economically unattractive. For these markets,
Accenture believes OEMs should not yet make significant investments, but
they should be regularly reevaluated. This is because they will require
high investment for a range of new capabilities such as dedicated sales
staff training and aftersales enablement once they begin to see demand
take off.

“Our research shows that automakers must carefully channel overall EV
investments toward the right country markets, using total unit market
size as an indicator of market attractiveness,” said Raab. “What is
clear is that government policy can rapidly change the rules of the
game, more than any other factor. For example, China has set targets for
EV and plug-in hybrids to make up seven percent of total car sales in
2020 and 40 percent in 2030, reaching an estimated 15.2 million units.
In parallel, China is hoping to see breakthroughs in battery and motor
technology, while planning to build a nationwide charging network.

“Car-makers must keep a close eye on how government agendas can
potentially open the way for an increase in EV demand -- especially at a
time when the industry seems to be reaching a tipping point toward
mass-market EVs,” she added.

Methodology

Each country was assessed on a range of political factors (one-time
government monetary subsidies at purchase, post-purchase monetary
government subsidiaries, non-monetary government regulations, charging
infrastructure); economic factors (purchase price, fuel price, and
number of potential buyers) and technological factors (range and charge
time).

About Accenture

Accenture (NYSE:ACN) is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries and all
business functions – underpinned by the world’s largest delivery network
– Accenture works at the intersection of business and technology to help
clients improve their performance and create sustainable value for their
stakeholders. With approximately 384,000 people serving clients in more
than 120 countries, Accenture drives innovation to improve the way the
world works and lives. Visit us at www.accenture.com.